The document provides an introduction to accounting, outlining its importance, definitions, and functions in business, as well as detailing financial statements and their objectives. It discusses the history of accounting, different branches, and the classification of business organizations, emphasizing key concepts such as stewardship, decision-making, and the roles of internal and external users of accounting information. Additionally, it highlights accounting's role in facilitating informed decisions and effective business management.

1. INTRODUCTION
TO ACCOUNTING
NORMAN T SAMERA
TEACHER III
UCNHS SHS ABM STRAND

2. OBJECTIVES
define accounting (ABM_FABM11-IIIa-1)
 describe the nature of accounting
(ABM_FABM11-IIIa-2)
 explain the functions of accounting in business
(ABM_FABM11-IIIa-3)
 narrate the history/origin of accounting
(ABM_FABM11-IIIa-4)

3. “Is accounting
important to
you/us?”.

4. BASIC FINANCIAL STATEMENTS
FINANCIAL STATEMENTS(FS)
are one of the most important documents in starting your own
business.
Are the outputs of the accounting process
It helps fulfil the **STEWARDSHIP FUNCTION of owners and
managers.
**STEWARDSHIP FUNCTION- means that the businesses should be
transparent on the performance and standing of the business to its
stakeholders.

5. Objective of FINANCIAL
STATEMENTS
• Provide information about the financial position, financial
performance, and cash flows of a business that is useful to key
personalities who are making economic
decisions.
• To meet this objective , financial
statements(FS) provide information about a
business’ ASSETS, LIABILITIES, EQUITY, INCOME, EXPENSE,
contributions to owners in their capacity as owners AND
CASH FLOWS.

6. COMPLETE SET of FINANCIAL
STATEMENT(FS) (***arrangedin
order/bystep)
1) INCOME STATEMENT
2) STATEMENT OF CHANGES IN EQUITY
3) STATEMENT OF FINANCIAL POSITION(aka before BALANCE
SHEET )
4) STATEMENT OF CASH FLOWS
5) NOTES TO FINANCIAL STATEMENTS( comprising of a
summary of significant accounting policies and other
explanatory informations)

7. Accounting Definition
• ACCOUNTING has many definitions and among the very common
definition of accounting .
ACCOUNTING -is a system that
provides quantitative
information about finances and
preparing the financial reports of
an entity.
But different Agencies have its definition of Accounting.

8. • Technical definitions of accounting have been published by different
accounting bodies. The American Institute of
Certified Public Accountants (AICPA)
defines Accounting as:
 “ the art of recording, classifying,
and summarizing in a significant
manner and in terms of money,
transactions and events which are, in
part at least of financial character,
and interpreting the results thereof.”

9. •According to American
Accounting Association [AAA]-
1941, defines Accounting
refers “to the process of
identifying, measuring and
communicating economic
information to permit informed
judgments and decisions by users
of the information”.

10. •According to the Accounting
Standards Council (ASC)
defines Accounting- is a service
activity. “Its function is to provide
quantitative information, primarily
financial in nature, about economic
entities, that is intended to be useful in
making economic decisions.”

11. • If you have observed in the different
definitions, you can see
Three (3) important key points which is
(1) accounting is basically about quantitative
information ;
(2) that quantitative information is likely to be
financial and
(3) that quantitative financial information must
be useful in making decision.

12. “ACCOUNTING is the
process of IDENTIFYING,
RECORDING, and
COMMUNICATING economic
events of an organization to
interested users.” (Weygandt, J. et. al)

13. • IDENTIFYING – this involves selecting economic events that are
relevant to a particular business transaction. The economic events
of an organization are referred to as *transactions.
• It is the first process used in accounting. It refers to the
identification of events as to whether they are recognized or not
in the financial statements.
*transaction- is an agreement between a buyer and a seller to
exchange goods, services or financial instruments.

14. Examples of ECONOMIC EVENTS OR TRANSACTIONS:
1. sales of bread and other bakery
products
2. purchases of flour that will be
used for baking
3. purchases of trucks needed to
deliver the products

15. •RECORDING – this involves
keeping a chronological diary of
events that are measured in
pesos. The diary referred to in
the definition are the journals
and ledgers which will be
discussed in future chapters.
Chronological diary= arranged according to its liquidity

16. •COMMUNICATING – occurs through the
preparation and distribution of financial
and other accounting reports.

17. Identification
Select economic events
(transactions)
Recording
Record, classify
and summarize
Accounting
Reports
SOFTBYTE
Annual Report
Prepare accounting
reports
Analyze and interpret
for users
Communication
ILLUSTRATION 1-1
THE ACCOUNTING PROCESS

18. THE NATURE/FEATURES OF
ACCOUNTING
• According to Accounting Theory (http://accountingtheory.weebly.com/nature-and-scope-of-accounting.html)
“Accounting is a systematic
recording of financial
transactions and the
presentation of the related
information to appropriate
persons.”

19. BASIC FEATURES/NATURES of
ACCOUNTING
1. Accounting is a service activity.
2. Accounting is a process.
3. Accounting is both an art and a
discipline.
4. Accounting deals with financial
information and transactions.
5. Accounting is an information
system.

20. QUESTION:
Why accounting is
considered as the
language of business?

21. ANSWER:
• Accounting is the (1)means by which business
information is communicated to business
owners and stakeholders. The (2)role of
accounting in business is to provide information
for managers and owners to use in operating the
business. In addition, accounting information
(3)allows business owners to assess the
efficiency and effectiveness of their business
operations.

22. ANOTHER ANSWER:
Accounting helps the users of these
financial reports to see the true
picture of the business in financial
terms. In order for a business to
survive, it is important that a business
owner or manager be well-informed.

23. •What are the
functions of
accounting in
business?

24. 3 FUNCTION/s OF ACCOUNTING
IN BUSINESS
1) To fulfil the stewardship function
of the management(or owner);
2) To help interested users come up
with informed decisions;
3) To support daily operations of
the business.

25. THE FUNCTION OF ACCOUNTING
IN BUSINESS
Read the situation below…
• Mr. Juan is a retired government employee who is good
at baking. One day he decides to put up a bakery shop in
your barangay. He renovates a portion of his house to
serve as the area for the production of bread. He
purchases baking equipment and raw materials to
produce five different types of bread. Mr. Juan also hires
Jose to help him with the baking and, at the same time,
to be in-charge of sales. Mr. Juan pays Jose on a weekly
basis. Every day, Mr. Juan’s wife deposits the daily cash
sales in their bank account at XY Savings Bank. With the
help of accounting, what possible decisions or questions
of Mr. Juan can accounting provide an answer to?
Question:
What are the possible Questions that you will if you were Mr. Juan situation?

26. Possible Answers:
• Is my business earning? (profitability)
• How much daily or monthly sales do I need in order to recover my
fixed cost? (break-even)
• Do I need to hire additional workers to help me with my
production? (staffing)
• Can I afford to set up a new store in another place? Where do I
get the funds?
• Can I afford to pay a bank loan?

27. BOOKKEEPING vs.
ACCOUNTING
•BOOKKEEPING is just confined
only with the recording of
MONETARY TRANSACTIONS,
which is one part of the
accounting process.
•ACCOUNTING is broader as it
includes the bookkeeping
function.

28. HISTORY OF ACCOUNTING
•Accounting is as old as civilization
itself. It has evolved in response to
various social and economic needs of
men. Accounting started as a simple
recording of repetitive exchanges.
The history of accounting is often
seen as indistinguishable from the
history of finance and business.

29. THE EVOLUTION OF ACCOUNTING
(fromoldestto latest)
1. The Cradle of Civilization. (from Mesopotamia, China and
India to Central and South America; clay
tablet=commercial transaction)
2. 14th Century - Double-Entry Bookkeeping.(dissemination of
double entry bookkeeping by Luca Pacioli (‘The Father
of Accounting’) in 14th century Italy. Luca Pacioli wrote
Summa de Arithmetica)
3. French Revolution (1700s). (Social upheavals affecting government,
finances, laws, customs and business)
4. The Industrial Revolution (1760-1830) (Mass production and the great
importance of fixed assets)
5. 19th Century – The Beginnings of Modern Accounting in Europe and
America. (formal accounting profession emerged in Scotland in 1854
when Queen Victoria granted a Royal Charter to the Institute of
Accountants in Glasgow, creating the profession of the Chartered
Accountant (CA).
6. The Present - The Development of Modern Accounting Standards and
Commerce.(accounting profession in the 20th century developed
around state requirements for financial statement audits)

30. Fra Luca Bartolomeo de
Pacioli(sometimes Paccioli or Paciolo
; c. 1447–1517) ( pronounced as Paquoli)
was
an Italian mathematician, Franciscan friar,
collaborator with Leonardo da Vinci, and an
early contributor to the field now
known as accounting. He is referred
to as "The Father of Accounting and
Bookkeeping" in Europe and he was the
first person to publish a work on
the double-entry system of book-
keeping on the continent.[3] He was also
called Luca di Borgo after his
birthplace, Borgo Sansepolcro, Tuscany,
ITALY.

32. Accounting is life.
If you think …Life is hard to
understand.
Therefore, Accounting is
hard to understand.
(sir norman)

33. • the branches of accounting: According to Investopedia,
(http://www.investopedia.com/university/accounting/accounting2.
asp:
• “Accounting is divided into
several branches to better serve
the needs of different users with
varying information needs.
These branches sometimes
overlap and they are often
closely intertwined.”

34. Branches of Accounting
1. Financial Accounting (broadest branch and is focused on the needs of external
users)
2. Management Accounting (emphasizes the preparation and analysis of
accounting information within the organization)
3. Government Accounting (deals with how the funds of the government are
recorded and reported. )
4. Auditing( two( 2)types of auditing: (1)external(examination of financial
statements by an independent CPA (Certified Public Accountant) ) and (2)internal
auditing(operational efficiency of the company regarding the protection of the
company’s assets, accuracy and reliability of the accounting data, and adherence
to certain management policies)
5. Tax Accounting (helps clients follow rules set by tax authorities)
6. Cost Accounting (subset of management accounting, cost accounting refers to
the recording, presentation, and analysis of manufacturing costs)
7. Accounting Education(developing future accountants by creating relevant
accounting curriculum.)
8. Accounting Research(search for new knowledge on the effects of economic
events on the process of summarizing, analyzing, verifying, and reporting
standardized financial information)

35. Practice activity ( identify which type
of branch of accounting)
1.Preparation of general-purpose financial statements
2. Evaluation of the performance of a sales department
3. Develop standards to address a new business set up
4. Review tax compliance of the business
5. Evaluate whether a branch of the business complies with the
collection and deposit policy of the company
6. Review whether the financial statements are presented fairly and
in compliance with accounting standards
7. Report on the spending of government funds
8. Report on the total cost
9. Conducting lectures on accounting topics

36. ANSWER:
1.Preparation of general-purpose financial statements Answer: Financial
2. Evaluation of the performance of a sales department Answer : Managerial
3. Develop standards to address a new business set up Answer: Accounting Research
4. Review tax compliance of the business Answer: Tax Accounting
5. Evaluate whether a branch of the business complies with the collection and deposit policy of
the company Answer: Auditing (Internal)
6. Review whether the financial statements are presented fairly and in compliance with
accounting standards Answer: Auditing (External)
7. Report on the spending of government funds Answer: Government Accounting
8. Report on the total cost of materials and labor used in the production Answer: Cost
Accounting
9. Conducting lectures on accounting topics Answer: Accounting Education

37. •What branch of
accounting do you
want to focus on
and why?

38. Users of Accounting
Information
• The learners shall be able to:
• define external users and gives examples ABM_FABM11-
IIIa-7
• define internal users and give examples ABM_FABM11-
IIIa-8
• identify the type of decisions made by each group of
users ABM_FABM11- IIIa-9
• describe the type of information needed by each group
of users ABM_FABM11-IIIa-10

39. What business YOU would want
to enter into?
answers:
• buying and selling of cars
• boutique
• gasoline station
• bakery
AND MANY OTHERS…..

40. From the businesses enumerated, choose one
business and use this as yourexample. Ask the
learners:
“If you were the owner, what do
you want to know about the
business? What possible
decisions can accounting
support?”

41. “Who uses accounting data or
information?”
There are two broad categories of users of
financial information:
1. internal users (who plan, organize, and
run the business; directly involved in
managing and operating the business;
include marketing managers, production
supervisors, finance directors, company
officers and owners )
2. external users (individuals and
organizations outside a company )

42. INTERNAL USERS (PRIMARY USERS) of accounting
information include the following: (MEO)
• Management (top level management, middle level of
management, lower level of management)
Information need: income/earnings for the period, sales, available
cash, production cost
• Employees /labor unions
Information need: profit for the period, salaries paid to employees
• Owners
Information need: profit or income for the period, resources or assets
of the business, liabilities of the business

43. •External users are individuals and
organizations outside a company
who want financial information
about the company. These users are
not directly involved in managing
and operating the business. The two
most common types of external
users are potential investors and
creditors.

44. External users (Secondary Users) of accounting information include the
following:)
• Prospective/Potential Investors- ask if his money grows overtime
• Potential Creditors: for determining the credit worthiness of an
organization. Terms of credit are set by creditors according to the
assessment of their customers' financial health. Creditors include
suppliers as well as lenders of finance such as banks.
• Tax Authorities or Government (BIR): for determining the credibility of
the tax returns filed on behalf of a company. Investors: for analyzing the
feasibility of investing in a company. Investors want to make sure they can
earn a reasonable return on their investment before they commit any
financial resources to a company.
• Suppliers/Customers: for assessing the financial position of its suppliers
which is necessary for them to maintain a stable source of supply in the
long term. Regulatory Authorities (SEC, DOLE)
• Regulatory bodies (SEC) and (BSP)
• Public(to know how the business affects the economy possible prospects
for employment, educational and research purposes)

45. QUESTION:
Is the Local Government
Unit (LGU) interested in
your accounting reports?
“Are the officers of the
Local Government Unit
internal or external users?
Why?

46. Forms of Business Organizations
• The learners shall be able to:
• • differentiate the forms of business organizations and nature
of business. (ABM_FABM11-IIIb-11)
• • identify the advantages and disadvantages of each form.
(ABM_FABM11- IIIb-12)

47. BUSINESS ORGANIZATIONS CAN BE
CLASSIFIED INTO TWO(2) :
1. ACCORDING TO OWNERSHIP
1.1. SINGLE or SOLE PROPRIETORSHIP
1.2. PARTNERSHIP
1.3 CORPORATION
1.4 COOPERATIVE
2. ACCORDING TO THE NATURE OF BUSINESS
2.1 SERVICES
2.2 MERCHANDIZING
2.3 MANUFACTURING

48. Four (4) FORMS of business organizations
1) Sole /Single Proprietorship(owned by one person; the simplest, and the most common
form of business organization; OWNER)
2) Partnership (A form of business owned by two or more persons. The details of
the arrangement between the partners are outlined in a written document called articles
of partnership. • Profits are divided among partners based on their agreed sharing. •
The owner is called a partner. (ARTICLE 1767 CIVIL CODE OF THE PHILIPPINES )
3) Corporation (A corporation is a business organized as a separate legal
entity (artificial person) under the corporation law with ownership divided into
transferable shares of stocks • Emphasize that it is the law (Corporation Code
of the Philippines) that creates a corporation. • The corporation begins its
existence from the date the Articles of Incorporation is approved by the
Securities and Exchange Commission (SEC). called stockholders or
shareholders. evidenced by a stock certificate. (Section 2, Batas Pambansa
Bilang 68 or Corporation Code of the Philippines)
4) Cooperatives(a duly registered association of persons with a common bond of interest,
voluntarily joining together to achieve their social, economic and cultural needs. • The owners are
called members who contribute equitably to the capital of the cooperative. • The members are
expected to patronize their products and services. regulated by the Cooperative
Development Authority (CDA). It is called member )

49. SOLE PROPRIETORSHIP
ADVANTAGES DISADVANTAGES
FULL CONTROL OF OPERATIONS UNLIMITED LIABILITY
EASY TO START, EASY TO DISSOLVE LIMITED LIFE
ALL PROFITS GO DIRECTLY TO THE
OWNER
DIFFICULTY IN RAISING CAPITAL
LESS REGULATIONS
GOVERNMENT TAXES THE OWNER
AND NOT THE BUSINESS

50. PARTNERSHIP
ADVANTAGES DISADAVANTAGES
INCREASED POTENTIALS FROM TWO
OR MORE DIFFERENT STRENGTH
UNLIMITED LIABILITY OF ONE OR ALL
OWNERS
EASY TO FORM WITH PROPER
AGREEMENTS ON ITS FORMATION
LIMITED LIFE (BUSINESS CEASES/STOPS
TO OPERATE IF ONE OF THE PARTNERS
DIES, PHYSICALLY OR MENTALLY
INCAPACITATED OR IMPRISONED)
LESS REGULATIONS COMPARED TO
CORPORATIONS
HIGH POSSIBILITY OF DISPUTE AND
CONFLICTS BETWEEN PARTNERS

51. CORPORATION
ADVANTAGES DISADVANTAGES
MORE SOURCES OF FUNDS MORE REGULATIONS TO BE FOLLOWED
EASY TO TRANSFER OWNERSHIP PROFIT IS TAXED AT THE CORPORATE
TAX RATE
LIABILITY OF OWNER IS LIMITED COSTLY or EXPENSIVE TO
INCORPORATE
UNLIMITED COMMERCIAL LIFE DOUBLE TAXATION(STOCKHOLDERS
ARE TAXED AGAIN WHEN PROFITS ARE
DISTRIBUTED TO THEM)

52. COOPERATIVE
ADVANTAGES DISADVANTAGES
UNLIMITED LIFE( CHANGES OF
MEMBERS DOENST NOT DISSOLVE THE
BUSINESS)
OBTAINING CAPITAL THROUGH
INVESTORS ( COOPERATIVE HAS “A
ONE-MEMBER- ONE –VOTE
PHILOSOPHY”
DEMOCRATIC ORGANIZATION (SOCIAL
EQUALITY)
LACK OF MEMBERSHIP AND
PARTICIPATION

53. STEPS USED in REGISTERING
SOLE PROPRIETORSHIP
REGISTERED PREFERRED NAME WITH DTI ( RENEWED EVERY
FIVE YEARS)
SECURE BARANGAY PERMIT
MUNICIPALITY/CITY PERMIT
REGISTER THE BUSINESS WITH BIR(REGISTRATION FEE EVERY
YEAR)
REGISTER THE BUSINESS WITH SSS, PHILHEALTH, HDMF or
PAG-IBIG

54. STEPS USED IN REGISTERING
PARTNERSHIP
VERIFY BUSINESS NAME WITH THE SEC
FILE ARTICLES OF CO-PARTNERSHIP WITH SEC
REGISTER THE BUSINESS NAME WITH DTI(OPTIONAL)
SECURE A BARANGAY PERMIT
APPLY BUSINESS PERMIT IN MUNICIPALITY (RENEWABLE
EVERY YEAR)
REGISTER THE BUSINESS WITH BIR(ANNUAL REG)
REGISTER THE BUSINESS WITH THE SSS, PHILHEALTH AND
PAG-IBIG

55. STEPS USED in REGISTERING
CORPORATION
VERIFY BUSINESS NAME WITH SEC
DRAFT AND EXECUTE THE ARTICLES OF INCORPORATION AND
BY-LAWS BY INCORPORATORS
DEPOSIT THE CASH COLLECTED FROM SUBSCRIPTION
FILE ARTICLES OF INCORPORATION AND BY-LAWS WITH SEC
REGISTER THE BUSINESS NAME WITH DTI(OPTIONAL)
SECURE BARANGAY PERMIT (RENEWABLE EVERY YEAR)
SECURE MUNICIPALITY/CITY PERMIT(RENEWABLE EVERY
YEAR)
REGISTER THE BUSINESS WITH THE BIR (ANNUAL
REGISTRATION REQUIRED)
REGISTER THE BUSINESS WITH THE SSS, PHILHEALTH AND
PAG-IBIG

56. STEPS USED in REGISTERING
COOPERATIVE
PREPARE GENERAL STATEMENT TO HELP MEASURE THE
COOPERATIVES CHANCE OF SUCCESS
DRAFT COOPERATIVE BY-LAWS
DRAFT THE ARTICLES OF COOPERATION
SECURE BOND FOR ACCOUNTABLE OFFICERS
REGISTER WITH COOPERATIVE DEVELOPMENT AUTHORITY
(CDA)

57. •Three (3)KINDS OF PARTNERSHIP
1. ACCORDING TO OBJECT
1.1. UNIVERSAL PARTNERSHIP PROFITS
A. UNIVERSAL PARTNERSHIP OF ALL PRESENT PROPERTY
B. UNIVERSAL PARTNERSHIP OF PROFITS
1.2 PARTICULAR PARTNERSHIP
2. ACCORDING TO DURATION
2.1. FIXED TERM or PARTICULAR IN NATURE
2.2 AT WILL- NO DEFINITE PERIOD
3. ACCORDING TO LIABILITY
3.1. GENERAL
3.2 LIMITED

58. KINDS OF PARTNERS
1. CAPITALIST ( FURNISHES CAPITAL)
2. INDUSTRIAL ( INDUSTRY OR LABOR)
3. GENERAL (LIABILITY IS BEYOND)
4. LIMITED (LIABILITY IS ONLY TO THE EXTENT)
5. MANAGING ( manages actively the firms)
6. SILENT (DOESN’T PARTICIPATE)
7. LIQUIDATING ( LIQUIDATES OR WIND UP)
8. OSTENSIBLE ( CONNECTION IS PUBLIC AND OPEN)
9. DORMANT (BOTH SECRET AND SILENT)
10. SECRET (CONCEALED OR KEPT SECRET)
11. NOMINAL(PARTNER BY ESTOPPEL)

59. •DISSOLUTION- is the change in the
relation of the partners caused by any
partner ceasing to be associated in the
carrying of the business
•WINDING UP- is the process of settling
business affairs AFTER DISSOLUTION
•TERMINATION- is the point in time
AFTER ALL the partnership affairs been
WOUND UP

60. CLASSIFICATION OF A
CORPORATION
1. PUBLIC CORPORATION
2. PRIVATE CORPORATION
3. QUASI-PUBLIC CORPORATIONS
OTHER CLASSIFICATION OF CORPORATION:
1. CLOSE CORPORATION (LIMITED NOT EXCEED 20 PERSONS)
2. OPEN CORPORATIONS( ANY PERSON)
3. PARENT OR HOLDING OR SUBSIDIARY CORPORATION( RELATED TO ANOTHER THAT POWER IS
EITHER DIRECTLY AND INDIRECTLY)
4. MIGRATORY CORPORATIONS( ORGANIZED UNDER THE LAWS OF THE STATE OTHER THAN OF THE
INCORPORATORS)
5. TRADING CORPORATION (COMMERCIAL CORPORATION ENGAGED IN BUYING AND SELLING)
6. TRAMP CORPORATION ( ONE CHARTERED IN ONE STATE WITHOUT ANY INTENTION OF DOING
BUSINESS THEREIN)
7. ECCLESIASTICAL CORPORATION( ORGANIZED FOR RELIGIOUS PURPOSE
8. ELEEMOSYNARY CORPORATION ( FOR CHARITABLE PURPOSES)
9. GOVERNMENT OWNED OR CONTROLLED CORPORATION (ORGANIZED BY GOVT)
10. CORPORATION BY PRESCRIPTION ( ONE IN WHICH HAS EXERCISED CORPORATE POWERS FOR AN
INDIFINITE PERIOD WITHOUT INTERFERENCE ON THE PART OF SOVEREIGN POWERS
11. CORPORATION BY ESTOPPELS ( REALITY NOT A CORPORATION BECAUSE IT IS DEFECTIVELY FORMED)

61. COMPONENTS OF
CORPORATION
1. CORPORATORS ( compose the corporation either
stockholders or members or both)
2. INCORPORATORS( those mentioned in the ARTICLES OF
INCORPORATION)
3. STOCKHOLDERS (owner of shares stock)
4. MEMBERS OF CORPORATORS OF NON-STOCK (do not own
the capital stock)
5. PROMOTERS ( person brings about or cause to bring about
the formation of corporation)
6. SUBSCRIBERS ( persons have agreed to take and pay for
original and unissued shares of the corporation)

62. CLASSES OF SHARES IN
GENERAL
1. PAR VALUE- specific amount fixed in the articles of incorporation
2. NO PAR VALUE- one without any stated value on the face of the
certificate of stock
3. VOTING SHARE- share with right to vote
4. NON VOTING SHARE- without the right to vote
5. COMMON SHARE- entitles the holder to an equal pro rata division
without preference
6. PREFERRED SHARE- entitles the holder to certain preference over
common stockholder
7. PROMOTION SHARE- issued to promoters as compensation in promoting
the incorporation
8. TREASURY STOCK- issued by the corporation as fully paid and later
reacquired by it either by donation or purchase
9. SHARE IN ESCROW- agreement that the share is deposited with third
person to be kept by the depository until the performance of a certain
condition
10. CONVERTIBLE STOCK- convertible or changeable from one class to
another

63. COOPERATIVE
• Is a business that is owned by a group of individuals who also
serve as benefactors to the business endeavor.
• Requires at least 15 members to function.
• Board of directors(BOD) and officers are elected to manage
the business operation.
• Types of cooperatives:
Credit cooperative, consumer cooperative, producers
cooperative, marketing cooperative, services cooperative, multi-
purpose cooperative, advocacy cooperative, agrarian reform
cooperative, cooperative bank, dairy cooperative, education
cooperative, electric cooperative, financial service cooperative,
fisherman cooperative, health services cooperative, housing
cooperative, insurance cooperative, water cooperative, transport
cooperative, workers cooperative

64. MOTIVATION (5 MINUTES)
1. Ask them the following questions:
• How much is your daily allowance?
• Do you know that with your daily
allowance you can own a company?

65. •Suppose you want to open your own sari-
sari store that will need PHP10,000 to
start and you used your PHP10,000
savings to start the said business.
•You are the sole owner of the said sari-
sari store. This type of business is called
sole/single proprietorship.”

66. ©LiftedfromSHSAccountancytextbook

67. ANSWER

68. Three (3) Types of Business
• 1. Service Business
A service type of business provides intangible
products (products with no physical form). Service
type firms offer professional skills, expertise,
advice, and other similar products.
• Examples of service businesses are: salons,
repair shops, schools, banks, accounting firms,
and law firms, tailoring shops, beauty shops,
doctors and others.

69. • 2. Merchandising Business
This type of business buys products at wholesale
price and sells the same at retail price. They are
known as "buy and sell" businesses. They make
profit by selling the products at prices higher
than their purchase costs.
• A merchandising business sells a product
without changing its form. Examples are:
grocery stores, convenience stores,
department stores, distributors, and other
resellers.

70. • 3. Manufacturing Business
Unlike a merchandising business, a manufacturing
business buys products with the intention of using
them as materials in making a new product. Thus,
there is a transformation of the products purchased.
• Ex. A factory, textile manufacturing firms, candy
manufacturing firm, etc.
A manufacturing business combines raw materials
(RM), labor(direct or indirect)(DL or IL), and factory
overhead(FoH)in its production process. The
manufactured goods will then be sold to customers.

71. Areas of Accounting Practice
• Accounting career opportunities may be divided into four (4) broad
areas or scope of practice.
• 1. PUBLIC ACCOUNTING(external auditing, tax
preparation and planning services)
•2. PRIVATE ACCOUNTING(Financial accounting,
cost accounting, budgeting, accounting information system, tax
accounting, internal auditing)
•3. GOVERNMENT ACCOUNTING
(Commission on Audit(COA), Bureau of Internal
Revenue(BIR),Department of Budget and Management (DBM) and
Bangko Sentral ng Pilipinas (BSP)
•4. ACCOUNTING EDUCATION(Forensic
Accounting, Information technology services,
Environmental Accounting, International Accounting)

72. KNOWN PUBLIC ACCOUNTING
FIRMS in THE PHILIPPINES
•SyCipGorresVelayo & Co. (SGV & Co.)
•Isla Lipana & Co.
•Reyes Tacandong & Co.
•Punongbayan &Araullo,
•Navarro Amper & Co.
•RG Manabat & Co.
•BDO Alba &Co.

73. • 1. Public Accounting
• Accountants in public practice are working in
accounting firms or individually to provide audit
and attestation, tax planning and preparation,
and advisory services to their clients.
• Accountants in public accounting serve clients on
a project or contractual basis.
• In CPA firms, new accountants start as accounting
or audit staff and work their way up to the junior
accountant, senior accountant, supervisor,
manager, and partner positions. After gaining
enough experience, they may also start a public
accounting firm of their own.

74. • 2. Private Accounting
• In private accounting, also known as practice
in commerce and industry, an accountant serves only
one company. Accountants in private accounting
provide a staff function which supports the company
by performing accounting-related tasks.
• Positions in private practice include entry-level jobs
such as bookkeeper, accounting clerk, financial
analyst, internal auditor, and others. From there,
new entrants can work their way up the
organizational chart and get to key management
positions such as Chief Internal Auditor,
Controller (Chief Management Accountant or Chief
Accounting Officer), and Chief Financial Officer (CFO).

75. • 3. Government Accounting
•Government agencies also need
accountants. These agencies need
accounting information to help them
plan, budget, forecast, and allocate
government funds. State auditors
are also employed by the
government to ensure the proper
use and allocation of the said funds.

76. •4. Accounting Education
•This area is made up of accountants
who are into teaching, research,
and training & development.
Accountants can pursue a career as a
faculty member in a school, an
author of an accounting book, a
researcher, a trainer, or a reviewer.

77. Quiz 1.0
1 whole
white pad

78. Define me….
Define ACCOUNTING according
to….
1. AICPA
2. ASC
3. AAA
4. Weygandt
5. Your own
definition/understanding

79. enumeration
•Five (5) complete set of
Financial Statement(in order)
•Five(5)accounting process(in
order)
•Five(5) basic features/natures
of accounting (in any order)

80. Essay ( min of 3 sentences)
•Why accounting is
considered as the
language of business?

81. QUIZ on Introduction to Accounting
• Instructions: For each item below, choose the letter that
corresponds to your answer. (10 items)
1. Which does NOT form part of the definition of accounting?
a. Provides information
b. Useful in decision making
c. Primarily concerned with historical data
d. Concerned with transactions of financial character

82. 2. Accounting provides which of the following information?
a. Qualitative information
b. Quantitative information
c. Financial information
d. All of the above
3. Accounting is
a. An art
b. A science
c. Both an art and a science
d. Neither an art nor a science

83. 4. Which of the following is an economic entity?
a. A charitable institution
b. A grocery store
c. Both A and B
d. None of the above
5. The branch of accounting that focuses on the preparation and
presentation of financial statements primarily
to external users.
a. Financial accounting
b. Management accounting
c. External auditing
d. Tax accounting

84. 6. Provides information used internally for planning, evaluating,
analyzing, and controlling business decisions and operations.
a. Internal auditing
b. Financial accounting
c. Management accounting
d. Forensic accounting
7. They are interested in a company's ability to continue its
existence, especially if they are heavily dependent on the
company's operations.
a. Government
b. Customers
c. Suppliers
d. Lenders

85. 8. The area of practice where CPAs provide accounting services
to several clients on a contractual or engagement basis?
a. Public accounting
b. Private accounting
c. Government accounting
d. Education or academe
9. Trade creditors are most interested in which accounting
information?
a. Profitability
b. Adaptability
c. Liquidity
d. Ability to continue operations

86. 10. The basic purpose of accounting is to
a. Provide information for decision-making
b. Compute the applicable income tax
c. Comply with state requirements
d. Determine the net income of a company

87. •Thank You for accessing
this file
Credits given to the following
References:
• https://www.accountingverse.com/accounting-basics/cdccacbaca
• https://en.wikipedia.org/wiki/Luca_Pacioli
• https://www.investopedia.com/terms/a/accounting.
• SHS ABM textbook/fundamentals of Accounting, Business and Management 1